BP prepares for year-long trial over Gulf spill

BP shareholders are braced for the start of a major trial into the Gulf of
Mexico oil spill that risks ensnaring the UK company in a year-long
courtroom battle.

Monday marks the beginning of a barrage of damaging publicity for BP as prosecutors for the US government, the Gulf states and local businesses lay out their case against the company in a courtroom in New Orleans.Photo: Rex Features

Monday marks the beginning of a barrage of damaging publicity for BP as prosecutors for the US government, the Gulf states and local businesses lay out their case against the company in a courtroom in New Orleans.

Almost three years after an explosion killed 11 people and left America with its worst offshore oil spill, the UK company is facing a trial that could end with a fine of almost $20bn (£13bn).

Settlement talks have been hampered by the complexity of the case and the number of parties with a stake in the outcome.

"They are not all or nothing propositions for either BP or the US government but there are billions of dollars at stake," said David Uhlmann, the former top prosecutor of environmental crimes at the Department of Justice.

The Department of Justice and the Gulf states, including Alabama and Lousiana, were reported last night to be working on a $16bn settlement that would either delay or avoid the highly-anticipated trial.

The trial is divided into two parts, with the first apportioning blame for the spill between BP, Transocean – which owned the Deepwater Horizon rig – and Halliburton, which cemented the Macondo well. Although BP has said it is prepared to settle on "reasonable terms", the company has recently adopted a more aggressive stance that saw it describe claims against it as "excessive."

Critically, BP also believes it can persuade US District Judge Carl Barbier, who will be sitting without a jury, that the company was not guilty of gross negligence.

Judge Barbier's ruling on that question will determine whether BP faces a fine of less than $5bn under the Clean Water Act or one of $17.9bn.